Market Afternoon Recap – November 10th

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USA

Key Notes for November 10th

  • Australia home loans m/m decline -0.7%, worse than expected
  • China CPI y/y comes in line with expectations of 1.6%; PPI y/y declines -2.2%
  • Italian industrial production declines -0.9% below expectations
  • Eurozone sentix investor confidence declines -11.9
  • Canada Housing starts lower at 184k vs. 200k estimates

The broad theme from Friday’s jobs data kept the flow going in today’s trading session without any major market moving events on the horizon. The Australia dollar was weak on home loans but managed to regain ground boosted by China’s inflation which managed to meet estimates.

The European trading session was relatively quiet with no major events. Italy’s industrial production continued to decline with latest data revealing a further weak reading of -0.9% while the Sentix investor confidence in the region was lower at -11.9 but improved when compared to the previous month’s reading of -13.7.

The only other news worth mentioning is the ECB’s Covered Bond purchase announcement, which will reveal the amount of covered bonds that were purchased by the ECB, followed by a speech by ECB’s Mersch in Germany.

Canada’s housing starts disappointed at 184k, coming out below expectations. The decline in the housing starts was due to a decline in multi-dwelling units and condominiums with an expectation of a continued decline in the housing starts, as noted by Bob Dugan, CMHC’s Chief economist.

Trading across the board was very subdued with the Greenback drifting lower. The Euro and British Sterling managed to gain ground against the US dollar with both the pairs bouncing off their 12 month lows, however it will be left to be seen how much of bullish momentum the Euro and the Pound could carry into a week which will see economic data pick up towards the latter part of the week. The current price action however is supportive of a corrective counter trend moves across most of the USD crosses including the USDJPY and the USDCAD.

Gold futures also managed to bounce off from their lows of 1137 levels to trade higher at 1150 handle at the time of writing. From a technical perspective current price action looks ripe for trading pullbacks within the larger bearish trends on the EURUSD, GBPUSD and Gold.

The only economic data out of the US will be the US Labor Market conditions index or the LMCI which has shot to fame after it became the Federal Reserve’s preferred choice for gauging the labor markets. The LMCI index has been stable at 2.5 for the last two months.

The US Dollar Index continues to remain well above the technical support levels. Data is also fairly limited for tomorrow with the exception of NAB business confidence and the RBNZ financial stability report. The US and Canada markets will be closed tomorrow.

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